Private equity firm Advent International has topped an earlier bid from rival Cinven for Stada and matched an offer from an undisclosed third party.
The German over-the-counter (OTC) and generic pharmaceutical company confirmed it received a legally binding offer from Advent valued at €58 per share – valuing the company at around €3.6bn – which is a couple of euros higher than Cinven’s €56-per-share proposal revealed earlier this month.
It has also emerged that the two-horse race has attracted another runner, with a third, non-binding offer from an unnamed company – rumoured to be Bain Capital – matching Advent’s €58-per-share deal and further raising the prospect of a bidding war for the company. Some analysts have suggested the eventual price could rise about €60 per share.
Stada said in a brief statement that Advent’s offer is open until Monday 27 February and the executive board “will review the offer in the best interest of the company and will continue the open-minded talks with all interested parties”.
Sources close to the bidding process have said that Advent has been able to make a binding offer because it has been granted access to information on Stada that has not yet been made available to the other parties, reports Reuters.
For months, Stada has been under pressure from rebel investor Active Ownership Capital (AOC) to shake up its operations, a campaign that resulted in the resignation of long-serving chief executive Hartmut Retzlaff and ousting of chairman Martin Abend last year.
AOC has argued that Stada has under-performed compared to its peers in the market, eschewing the M&A that swept through the generic industry in the last few years, and needs to develop a new culture in order to succeed on the international stage.
In a statement, Advent said its binding offer was a 66% premium to Stada’s share price prior to the publication of share purchases of activist investors, and that if accepted the drugmaker’s current shareholders would also receive a dividend payment in June 2017.
“Advent would further boost Stada’s growth through investments in new products, line extensions and acquisitions,” the equity group said, pointing to opportunities for expansion in Asia and Latin America. It insisted too that it “has a firm commitment to Stada’s management, its long-term strategy and to Germany as a base for business and future investment”.